ACH Payment API

ACH Payment API: What Is It and How Does It Work?

ACH Payment Processing APIs

To best explain what an ACH Payment Processing API is, we will first walk you through the basics of the ACH network as well as how APIs work to make ACH transactions smoother and more cost-effective for both vendors and consumers.

The ACH Network

ACH stands for Automated Clearing House and is a banking network system that is designed to receive and send money between bank accounts across the United States. It is run by the National Automated Clearing House Association, known as “Nacha.” This network is often referred to as the ACH network.

 How Does An ACH Transfer API Work?

ACH transfers are bank account transfers between personal and business bank accounts that have to be transferred through the Automated Clearing House network. ACH APIs are usually integrated for the security and functionality of such payments. The most common ACH payment APIs have focused on credit card processing, but they are also used for peer-to-peer and business payments as well as for cryptocurrency transactions and for high-risk merchants.

Peer-to-Peer and Business Payments

As traditional credit card processing gives way to new technologies, one of the most popular methods of payment is peer-to-peer. Put simply, this involves one individual sending payment to another, whether it’s for a product, service or just to split the tab at a group lunch. Paypal was one of the first on the scene, allowing online buyers and sellers to speed up transactions by allowing for near-instantaneous payment on auctions and other purchases. The technology employed by

Paypal validates bank accounts and account balances in real-time to reduce risk. A key method of driving engagement used by Paypal is when existing users take a new action, such as adding a new bank account as a funding source. This approach has helped solve the problem of verification taking too long with previous methods.


As cryptocurrencies continue to soar into the financial stratosphere, transactions using Bitcoin, Ethereum and others are becoming more mainstream with each passing day. In response to this, Yodlee has teamed up with to provide real-time account verification for more than 32 million users across 200 countries. This will open banking access to new users, onboarding them safely and securely as they fund accounts without the need to provide micro-deposits.

The financial services industry is being disrupted by a new wave of innovative businesses, and for these businesses to thrive, it’s critical to acquire new users at speed. Simplifying the verification process enhances the user experience and cuts down onboarding to a matter of seconds.

High-Risk Merchants

Some companies are considered “high-risk merchants” by financial institutions. This could be because they operate in legal gray areas or it could be because of the risk of chargeback and fraud. Cannabis companies, travel agencies and online casinos are a few examples of high-risk merchants.

Whatever the reason for the classification, it’s imperative that high-risk companies work with high-risk ACH merchants to establish accounts for online payments. Why? The lower fees and quick disbursement are a must for merchants looking to compete in an already crowded competitive landscape. To keep chargebacks and fraud under control, high-risk businesses should employ tools such as payment gateways to keep transactions safe and secure.

Advantages of ACH Payment API Integration

Given all this, why, then, would you need an API for ACH transfers if they already happen automatically on the ACH network? The answer is that APIs work 24/7, 365 days a year, unlike humans. Banks usually shut down during nights, certain weekend days and holidays, which adds up to a lot of time your money is sitting idly — and unnecessarily — waiting for doors to reopen. By implementing API integration into your ACH process, you’re shortening the time between transmission and reception of a given payment while substantially reducing risk.

Because many ACH payments involve credit cards and debit cards, API integration allows for organizations to quickly integrate their payment portals with banks, keeping transaction fees lower across the board and ensuring that money is quickly and efficiently deposited into their account after verification. The ACH Payment API from Envestnet | Yodlee is the perfect white label ACH solution, as we’ll discuss below.

APIs for ACH Payments From Envestnet | Yodlee

Envestnet | Yodlee offers organizations an array of ACH payment solutions that provide individuals, businesses and financial institutions faster and safer processing of payments. Whether it’s for a better way to process payroll, make payments to vendors, or just send money to friends, Envestnet | Yodlee has an ACH direct deposit solution to make moving money convenient and secure.

Companies using Envestnet | Yodlee bank APIs can take advantage of several features. The first is aggregation, which helps onboard clients into a given app. The second is verification, which helps keep bad actors such as fraudsters out of the picture by quickly verifying that the client is, in fact, the account holder they say they are.

Yodlee’s ecosystem allows for ACH payment processing via Bank Account Verification and Financial Data Aggregation APIs and can partner with other organizations to offer packaged payments-based solutions. One of these is Productfy, which offers scalable, affordable and unified payment infrastructure that combines payment, program management and compliance under a single roof. Our developer portal is tailored for aggregation and verification. It’s a free product with easy access, sample code and access to the same tools the biggest FinTechs in the industry use.

NACHA and Envestnet | Yodlee

As a Nacha Preferred Partner, Envestnet | Yodlee is committed to meeting and improving the compliance standards of ACH transactions on the ACH Network. NACHA oversees the ACH network by delivering rules, solutions, education and advisory services to its certified partners. Being partners with Nacha means that any time you send money via ACH, the transaction is verified as legitimate, reducing the risk of fraudulent activity.

Envestnet | Yodlee’s ACH solutions are cost-effective, time-efficient and help reduce fraud. By meeting industry mandates, our solutions lower the risk of same-day ACH expedited payments, even for high risk businesses. We help empower your organization to offer a variety of flexible payment options while cutting the time from payment to deposit, lowering fees and eliminating many manual processes.